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TMI Blog2006 (9) TMI 459X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the refund claim pertain to CVD and the respondents had already availed Modvat credit of the same as was evident from the certificate submitted by the Central Excise authorities. He therefore held that the refund cannot be sanctioned till the credit of CVD taken is debited by the manufacturer. The Assistant Commissioner further held that the respondent had not submitted documents to establish that they have not passed on the incidence of duty to his customer and therefore the refund could not be sanctioned in view of provision of sub-section (2) of Section 27 of the Customs Act. The claims were accordingly rejected. 2. On appeal the Assistant Commissioner s order was set aside to the extent that it was held that the bar of unjust enrichment will not apply in case of provisional assessment and since in this case the duty was assessed provisionally the same would not be applicable. While coming to this conclusion the Commissioner (Appeals) held that the Supreme Court decision in the Mafatlal [1997 (89) E.L.T. 247 (S.C.)] case would be applicable in the case of customs also. He held that the doctrine of unjust enrichment would not be applicable in the case of refund arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the Petitioners on Para 95 of the judgment of the Apex Court in the case Mafatlal Industries (supra) wherein it is held that any recoveries or refunds consequent upon the adjustment under Rule 9B(5) of the Central Excise Rules are not governed by Section 11A or Section 11B of the Central Excise Act. Relying upon the above observation it was contended that the principles of unjust enrichment contained in Section 27 are not applicable to the refund arising under Section 18 of the Customs Act. This contention of the Petitioners is totally misconceived. Although Section 18 of the Customs Act is substantially similar to Rule 9B of Central Excise Rules, there was material difference between the two Acts at the relevant time. It must be remembered that the Apex Court in the case of Mafatlal Industries (supra) has held that only in case of recoveries or refunds consequent upon the adjustment of Mafatlal Industries (supra) has held that only in the case of duty determined on finalization of provisional assessment under Rule 9B(5) will not be governed by the provisions contained in Section 11A or Section 11B of the Central Excise Act. The Apex Court has not laid down that even i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... B of the Central Excise Act. In other words, after 25-6-1999, even the refunds arising under Rule 9B(5) are governed by the provisions of Section 11B of the Central Excise Act. Thus, in view of the above lacuna in the Central Excise Law, the Apex Court in the case of Mafatlal Industries held that the refund arising under Rule 9B is not subjected to Section 11A or Section 11B of the Central Excise Act. There was no such lacuna in the provisions contained under the Customs Act. Therefore, the contention of the Petitioners that in view of the judgment of the Apex Court in the case of Mafatlal Industries (supra), the refund arising under Section 18 of the Customs Act cannot be subjected to the provisions of Section 27 of the Customs Act, cannot be accepted. Since refunds arising under Section 18 of the Customs Act has been expressly subjected to the procedure prescribed in Section 27 of the Customs Act. it is not open to the Petitioners to contend that the Parliament in its wisdom thought it fit not to subject the refunds arising on finalization of provisional assessment within the purview of Section 27 of the Customs Act. 4. In view of above it was submitted that even in respect of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ussa Overseas was incorrect as they have wrongly concluded that in case of finalization of assessments under Section 18 of the Customs Act a separate claim of refund is required to be made under Section 27 of the Customs Act. It was submitted that, the Apex Court in Allied Photographics India case has held that provision relating to provisional assessment and finalization thereof and grant of refund consequent upon such finalization under Rule 9B are a complete code in themselves and that Rule 9B begins with a non-obstante clause and cast an obligation on the concerned officers to make an order of refund which is independent of and not governed by the provisions of Section 11B. It was submitted that this judgment of Supreme Court will clearly apply to refunds due upon finalization of provisional assessment under Section 18(2) of the Customs Act, 1962 as well which also begins with a non-obstante clause and is worded in the same manner as Rule 9B of the Central Excise Rule, 1944. Therefore keeping in mind the distinction between making of refund and claiming of refund drawn by the Supreme Court, it would follow that where the provisional assessment is finalized under Section 18(2) a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l however conceded that refund of CVD duty will not be available in case of credit of duty has been taken. 8. We have considered the submission. We find that the ratio of all the Apex Court decisions discussed in the preceding paras is that once a refund claim is required to be made under provision of Section 27 of the Customs Act, 1962 or Section 11B of the Central Excise Act, 1944 and refund is not to be sanctioned suo moto on finalization of the provisional assessment then the bar of unjust enrichment will apply. Whether a separate claim is required to be made under the Customs Act or not as required under the Central Excise Act has been discussed in detail in Paras 31 to 33 of the Bombay High Court decision in the Bussa Overseas case the relevant portion of which have been reproduced elsewhere in the preceding paragraph, and which decision has been affirmed by the Supreme Court when the appeal against the same was rejected by the Supreme Court, as reported in 2004 (164) E.L.T. A177. Para 33 in particular brings out that since refund arising under Section 18 of the Customs Act has been expressly subjected to the procedure prescribed in Section 27 of the Customs Act, it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f applicability of Section 11B of Central Excise Act the doctrine can be invoked to deny the benefit to which the person is not otherwise entitled. Section 11B of the Act or similar provision merely gives legislative recognition to this doctrine, that, however, does not mean that in absence of statutory provision, a person can claim or retain undue benefit. Before claiming relief of refund, it is necessary for the petitioners/appellant to show that he has paid the amount for which relief sought, he has not passed on the burden on consumer and if such relief is not granted he would suffer loss. 11. In view of above, we hold that all types of refund whether under the Customs Act or under the Central Excise Act will be liable to doctrine of unjust enrichment and accordingly allow the Revenue s appeal to this extent. 12. We, however, feel that the respondents should be given an opportunity to establish that the incidence of duty was not passed on to the customers if it so wishes, as we note that the appeal was allowed by the Commissioner (Appeals) on the main issue of law itself and, therefore, there was no need for the respondents to make such a submission. We, accordingly, remand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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